New research will enable Australians to better predict wage theft

Cafe workers
The project aims to take a preventative approach to underpayment and exploitation by empowering young workers to predict and identify wage theft. Image credit: Zachary Staines/Unsplash.

A University of Melbourne research team is developing a suite of tools to help Australian workers and regulators address exploitation and ‘wage theft’ in a new project launched today.

Designed in 2020 amid the COVID-19 recession and led by Professor John Howe and Timothy Kariotis from Melbourne School of Government, the project A Fair Day’s Work: Detecting Wage Theft with Data aims to take a preventative approach to underpayment and exploitation by empowering young workers to predict and identify wage theft, enabling targeted enforcement by regulators, and supporting more targeted data-informed policies on youth unemployment.

The project will draw on cross-disciplinary expertise in labour law and regulation, digital design, information science, user experience (UX) design, data analysis and data ethics to develop three interlinked components:

  • The Fair Day’s Work portal providing tailored information to young workers;
  • A Wage Theft Database that will bring together a wide range of data sources to support a deeper understanding of wage theft in Australia;
  • A Wage Theft Prediction Tool that will enable an assessment of which employees are at risk of exploitation and underpayment.

The project has been selected by the Paul Ramsay Foundation as part of the Inclusive Growth and Recovery Challenge cohort led by data.org.

Research has shown that while experiences of wage theft – which is estimated to run into the hundreds of millions of dollars each year – have grown, the most vulnerable workers are the least likely to act due to fear of losing their jobs. A report by the Young Workers Centre in 2017 found that one in five young workers were not paid the minimum wage and around 40 per cent of young workers have worked off the books.

Project co-lead Timothy Kariotis said the project’s multi-pronged approach will support young people at risk of wage theft while also providing critical data for regulators, policymakers and businesses to drive system change.

“Underpayment of workers, or ‘wage theft’, is highly entrenched and normalised across industries where young workers make up the majority of employees, particularly affecting women, migrant workers and international students,” Mr Kariotis said.

“It denies them fair income and also increases financial insecurity, helping entrench the cycle of disadvantage. The burden currently falls on young people to report exploitation and underpayment to the regulators, unions, or community legal centres. However, many young people may not know their employment rights or may fear losing their job – especially in an economy where jobs for young people are scarce.”

Jenny Tran, Lead Analyst at the Paul Ramsay Foundation, said the pandemic has increased the risk of wage theft, underscoring the project’s important role in supporting fair pay and helping break cycles of disadvantage.

“The recession caused by COVID-19 increases the risk that employers may try to address shortfalls in revenue by either intentionally or accidentally making changes to employee conditions that deny young workers their entitlements in breach of the law,” she said.

“Given these challenging economic conditions and the growth of casualisation and other forms of precarious work, the risk of future wage theft is high. We are proud to support Melbourne School of Government in this important work driving social change through data innovation, and honoured to help them become part of the first data.org cohort.”

“Wage theft, and its disproportionate impact on young and vulnerable workers, is an issue where we believe data science can bring exceptional benefit,” Danil Mikhailov, executive director at data.org said.

“We are pleased to partner with the Paul Ramsay Foundation in support of this important work at Melbourne School of Government, and look forward to further developing our partnership as we work to build the field of data science for social impact.”

About the Paul Ramsay Foundation

Established in 2006, the Paul Ramsay Foundation is an Australian charitable organisation that seeks to understand cycles of disadvantage and support organisations that are working to create thriving communities, employment and education. It supports the for-purpose sector by actively working to build skills and capability, share knowledge and develop the infrastructure required to support social change.

About data.org

data.org is a platform for partnerships to build the field of data science for social impact. It works with organisations from all over the world to increase the use of data science globally.

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